While many TSX-listed stocks pay dividends, only a few have the financial strength to maintain and even grow those payouts for decades. These reliable dividend payers are ideal for investors seeking stable, worry-free passive income.
One such high-quality dividend stock is Enbridge (TSX:ENB), which currently offers a high yield of over 6%. Moreover, this energy transportation and distribution company has a track record of paying and increasing its dividend for decades.
Looking ahead, Enbridge’s highly diversified business model and low-risk, resilient cash position it well to generate solid distributable cash flow (DCF), supporting future payouts. Moreover, it can navigate through challenges in the coming years.
Enbridge: 30-year dividend-growth history
For more than 70 years, Enbridge has been a reliable source of income for investors. Moreover, it continues to strengthen that reputation. In December 2024, the energy infrastructure giant announced a 3% increase to its dividend, raising the quarterly payout to $0.9425 per share. On an annualized basis, that brings the 2025 dividend to $3.77 per share.
This most recent increase adds to an impressive long-term record. Over the past three decades, Enbridge’s dividend has grown at an average compound growth rate (CAGR) of 9%. This consistent growth is a reflection of the company’s highly resilient business model. Enbridge owns and operates energy infrastructure that generates predictable, low-risk cash flows. These cash flows have held up through various economic, commodity, and geopolitical cycles.
The reliability of Enbridge’s income streams is supported by its long-term contracts, power-purchase agreements, regulated cost-of-service frameworks, and other low-risk arrangements. These factors help ensure steady earnings regardless of broader market volatility, making Enbridge’s dividend payments dependable.
This large-cap company’s commitment to growing its dividend hasn’t come at the expense of its growth. Enbridge maintains a sustainable dividend payout ratio between 60% and 70% of DCF. This conservative approach enables it to return a significant portion of its earnings to investors while still retaining sufficient capital to reinvest in future growth.
In short, Enbridge is a reliable high-yield dividend stock to generate steady income.
Enbridge to keep hiking its dividend
Enbridge is well-positioned to keep growing its dividend. The company’s vast portfolio of over 200 asset streams, bolstered recently by the addition of three top-tier U.S. gas utilities, generates consistent, high-quality cash flows. Moreover, these assets are supported by a low-risk commercial structure, which adds stability and drives DCF.
Notably, over 98% of Enbridge’s income is backed by regulated frameworks or long-term take-or-pay contracts, shielding it from the volatility in commodity prices. While exposure to commodity price swings is minimal for Enbridge, more than 80% of its earnings are supported by built-in inflation protection, either through indexed contracts or regulatory mechanisms.
Even in the face of global trade tensions, Enbridge’s strategically located infrastructure is expected to remain in high demand. The company doesn’t foresee tariffs significantly impacting its financials, thanks to its positioning within key demand-pull markets. Its expanding presence in gas transmission puts it in a strong position to benefit from rising demand from LNG facilities, coal-to-gas transitions, and the energy needs of data centres.
In addition to this growth potential, Enbridge is strengthening its leverage profile. With contributions from the newly acquired utilities, the company is targeting a debt-to-earnings before interest, taxes, depreciation, and amortization ratio in the healthy range of 4.5 to 5 times and expects to improve it further.
Looking ahead, Enbridge is guiding for mid-single-digit growth in earnings and DCF per share. Its growing earnings and DCF will serve as a solid foundation for continued dividend increases, making Enbridge a compelling investment for income seekers.
